8-Jul-216 Focus: Short week ends in green Market saw a dull opening with indices showing losses although it gradually improved during the week to mark a positive end. Highest turnover of the week was recorded on Thursday pertaining to the crossings took place in JKH and LLUB while lowest turnover was recorded on Monday. Foreign selling continued except on Thursday while recording YTD net foreign outflow of LKR 5.63 Bn. Manufacturing sector contributed mostly to the market turnover during the week while Land and property sector became a highest gainer.(+1.47 %) JKH, CCS and LOLC moved up ASPI by 32.53 points while CARS, CTC and DIAL dragged down the index by around 9.2 points. During the week ASPI was up by 79 points and S&P SL 2 was up by 55 points respectively. Market Indicators This Week Last Week % Change YTD ASPI 6,366 6,287 1.26% -7.3% S&P SL 2 3,358 3,33 1.67% -6.71% For. Pur(LKR Mn) 1,283 1,216 5.5% 32,181 For.Sales(LKR Mn) 98 1,437-31.84% 38,427 Mkt Cap.(LKR Mn) 2,713,17 2,679,257 1.26% -8.38% Turnover (LKR Mn) 2,458 2,719-9.61% Volume (Mn) 93.56 97.36-3.91% PE 13.6 12.9 1.26% PBV 1.48 1.46 1.25% Daily avg.turnover(lkr Mn) 614 544 12.99% Daily avg.for.pur(lkr Mn) 321 243 31.88% Daily avg.for.sales(lkr Mn) 245 287-14.8% Top 5 Turnover ASPI, S&P SL 2 and Volume Company This Week Last Week % Change Price (LKR) 8, 7,5 7, 6,5 6, 5,5 5, 4,5 4, 3,5 3, Rupee appreciated slightly during the week and closed at LKR 145.24 per USD. One-year T-bill rate increased to close at 1.56%. Gold prices increased to close at 1355.83 $/Oz while oil price decreased to close at 45.65 $/Barrel. 2,5 7/8/215 9/8/215 11/8/215 1/8/216 3/8/216 5/8/216 7/8/216 VOLUME ASPI S&P SL 2 45, 4, 35, 3, 25, 2, 15, 1, 5, YTD Net Foreign inflow/(outflow) - LKR Bn (5.63) LLUB.N 769,347,22 933,967,95-18% 152.5 JKH.N 741,22,13 168,119,36 341% 14.5 EXPO.N 89,91,763 21,742,99 31% 6.8 NDB.N 53,322,481 169,675,672-69% 17. CLND.N 46,749,94 64,41 72% 115. Top 5 Gainers Company This Week Last Week % Change Volume JKH.W23 7.4 4.8 54% 32,418,9 TFC.X 3.7 3. 23% 294,684 ACAP.N 11.5 9.6 2% 66,862 ASPI Contributors for the Week TFC.N 8.1 6.8 19% 41,527 Points HPFL.N 6.9 6. 15% 458,77 2 18 16 14 12 1 8 6 4 2-2 -4-6 -8-1 -12 JKH.N CCS.N LOLC.N COMB.N AHPL.N UBC.N OSEA.N DIAL.N CTC.N CARS.N Top 5 Losers Company This Week Last Week % Change Volume CPRT.N 82. 1. -18% 13,761 CFL.N 18.7 21.8-14% 81 PHAR.N 625.2 698.5-1% 39 ATL.N.9 1. -1% 1,297,529 LCEY.N 72.1 8. -1% 1 Top 5 Sector Gainers Research Contact Sector This Week Last Week Gain % Shehan Bartholomeuz +94 11 5889835 POWER & ENERGY 159.66 155.71 2.54% Gayan Rajakaruna +94 11 5889837 HEALTH CARE 1,43.44 1,18.78 2.42% Hiruni Perera +94 11 588989 PLANTATIONS 672.36 659.29 1.98% DIVERSIFIED 1,596.8 1,565.23 1.97% Important Disclosure and Contact Details: Page 5 BANK FINANCE INS 15,563.13 15,273.62 1.9% LOLC Securities Limited,No.481,T.B.Jayah Mawatha, Colombo 1, Sri Lanka
LKR per kg LKR//US $ % Millions Turnover and Foreign Trading Local Market 1,2 1, ASPI S&P SL 2 % change 6,366 1.26% 3,326.72% 8 AWPR (Weekly) 1.15% 1.5% 6 USD:LKR 145.24 -.32% 4 2 JPY:LKR EUR:LKR 1.45 1.95% 161.29 -.83% 7/1/216 7/4/216 7/5/216 7/7/216 7/8/216 Foreign Purchase Foreign Sales Turnover World Market % change WTI Crude Oil (USD/barrel) 45.65-6.82% T-Bill and AWPLR Gold (USD/Ounce) 1355.83 1.8% 11. 1.5 1.6 1. 1.1 9.5 9.6 9. 9.1 8.5 8.6 8. 8.1 7.5 7.6 7. 7.1 6.5 6.6 6. 6.1 7/8/215 9/8/215 11/8/215 1/8/216 3/8/216 5/8/216 7/8/216 AWPLR (LHS) T Bill Rate- 12 months (RHS) S & P 5 297.9 -.24% MSCI AC Index 128.92 -.55% Sector Multiples Sector PER(x) PBV(x) Banks, Finance and Insurance 7.5 1.2 Beverage, Food and Tobacco 17.2 3.8 Chemicals and Pharmaceuticals 1.7.9 Construction and Engineering 34.5 1. Diversified 14.2 1.1 Footwear and Textiles 24..6 Exchange Rate Healthcare 16.9 2.9 155. 15. 145. Hotels and Travels IT Investment Trust Land and Property 47.3 2.1 -.5 - - 9.2.9 14. 135. 13. 8.1 1.5 7.7.8 54.4 1.4 -.6 9.3 1.4-1.3 15..7 Tea and Rubber Prices Telecommunication 15.7 1.3 475 45 425 4 375 35 325 3 275 25 225 2 2-Jul-15 2-Aug-15 2-Sep-15 2-Oct-15 2-Nov-15 2-Dec-15 Latex Rubber Low Grown Tea Source: Rubber Development Department of Sri Lanka/Forbes & Walker Tea Brokers Manufacturing Motors Oil Palm Plantations Power and Energy Services Stores and Supplies Trading 13..9 Quote of the Week: In the short run the market is a voting machine, but in the long run it is a weighing machine. - Benjamin Graham LOLC Securities Limited,No.481,T.B.Jayah Mawatha, Colombo 1, Sri Lanka Page 2
Weekly Crossings Dividend Announcements Security No Price(LKR) Quantity Security DPS(LKR) Type XD Date Monday JKH 1 135. 358, VONE.5 Interim 2/7/216 Wednesday JKH 8 139. 3,, LLUB 8 15. 1,696,525 Friday LOLC 1 81. 325, JKH 1 14.7 1,1, EXPO 1 6.6 12,156,513 NDB 1 17. 289,18 CSE CCorporate Announcements CONN announced that 1,441,27 ordinary shares were listed with effect from today pursuant to a scrip dividend in the proportions of 1:35. CHOT announced that Board has approved a reduction of stated capital of the company to wipe off the carry forward loss of LKR 1.2 Bn. LOLC Securities Limited,No.481,T.B.Jayah Mawatha, Colombo 1, Sri Lanka Page 3
Corporate News Dialog Axiata has improved its disaster early warning system to send localised message alerts by mobile phone to only warn people at risk in specific areas in Sri Lanka, an official said. The improvements were part of upgrades to Dialog s Disaster Early Warning Network (DEWN), the mass alert early warning system, said Charitha Ratwatta, Head of Group Sustainability at Dialog Axiata. Improvements include SMS messages being sent to the first responders of the government hierarchy and digital broadcasting. DEWN, a system that dispatches alerts related to disaster via a mobile phone application, is now being handled by the Disaster Management Centre (DMC). Originally developed after the Indian Ocean tsunami and done in partnership with University of Moratuwa Mobile Communications Research Laboratory and Microimage Pvt Ltd., the system can now give alerts about other risks like floods-economynext Ceylon Hotels Corporation has called an EGM in September to seek shareholder approval for the reduction of its stated capital to wipe off their carry forward losses.the directors have proposed to reduce the stated capital of the company from 1.22 billion rupees to 198.5 million rupees while setting off a carry forward loss of 1.2 billion rupees. The losses adversely affect the Company s ability to pay a dividend to its shareholders, the company said in a stock exchange filing. Furthermore, the Solvency Test requirements have to be satisfied prior to any dividend distribution in the future. The company had 171,825,41 ordinary shares and a carry forward loss of 1.2 billion rupees by the end of March 216.-LBO Economic News Sri Lanka's foreign direct investment in Sri Lanka dropped 52 percent to 164.5 million US dollars in the first quarter of 216 from 346.5 million dollars a year earlier, official data showed.the FDI flows included foreign loans.in 215, FDI with loans also fell from 29 percent to 1,161 million dollars from 1,635 million dollars.sri Lanka has gone through a period of policy instability over the past 15 months with economic policy in particular turning illiberal with ad hoc taxation undermining just rule of law. An experiment with Keynesian stimilus involving and loose fiscal and monetary policy, has generated a balance of payments crisis, leading to an International Monetary Fund backed program to bring back stability.rating agencies have downgraded Sri Lanka's credit and expressed concern at the ability of the new administration to implement declared policies.-economynext Excise tax revenues from vehicles fell 1.6 percent to 59.433 billion rupees in the first four months of 216 from a year earlier, data from the finance ministry showedduring the period motor vehicle imports had fallen 23 percent, with cars falling 43 percent, buses 52.7 percent and trishaws by 62.6 percent. Sri Lanka raised taxes of vehicles saying people do not deserve cars were buying them while other said it was to fix a balance of payments problem.sri Lanka has a strong Mercantilist false doctrine where there is a belief that fuel and car imports cause balance of payments trouble rather than money printing by the central bank. During the latest balance of payments crisis.mercantilists could not blame either fuel or even the overall trade deficit as the trade gap was also steady amid slower inflows coming through the financial account - economynext Sri Lanka's tourist arrivals grew just 2.2 percent to 118,38 in June 216 from a year earlier, with slow growth from Western Europe and India, while arrivals from the Middle East plummeted amid Ramadan.In the six months to June tourist arrivals were grew 16.2 percent to 964,267. Arrivals from the Middle East, Pakistan, Maldives, Malaysia and Indonesia plunged in the Holy month while growth from India was also slow. Arrivals from Western Europe grew 6.6 percent to 29,559 with UK arrivals up 9.6 percent to 9,46. UK is Sri Lanka's third largest generating market after China and India.-economynext Sri Lanka has called for expressions of interest from domestic and international companies to invest and operate Mattala Rajapaksa International Airport, the country's second airport.the Ministry of Transport and Civil Aviation said in an advertisement in state-run The Sunday Observer newspaper that long term lease options were available for investors.the airport had been designated as a bonded area and free trade zone.the airport will have a fully open skies policy with all freedoms of the air indicating that foreign airlines will be able operate to third countries and to domestic airports from the airport.expressions for interest will close on August 12, 216. The Chinese designed and built airport Mattala Rajapaksa International Airport, has made large losses and has been unable to service loans, becoming a drag on Airport and Aviation Services (Sri Lanka) Ltd, the state airport company.-economynext Global Buzz Gold extended gains near its highest price in more than two years and the yen continued to climb as anxiety over the impact of the Brexit decision damped the prospect of higher U.S. interest rates this year. Asian stocks outside Japan rose along with crude oil. Precious metals have been rallying as an element of risk aversion returns to markets, with minutes of the Federal Reserve s last meeting, which took place before the U.K. referendum, signaling officials were losing confidence in the need to hike borrowing costs any time soon. That hit the dollar, which is near a two-week low versus the yen. Commodity producers led gains in Asia as oil neared $48 a barrel, while the yen s gains weighed on Japanese equities and FTSE 1 Index futures jumped. Corn futures snapped a six-day slide-bloomberg Samsung Electronics Co. reported its biggest operating profit in more than two years, bolstered by brisk demand for its Galaxy S7 smartphones, cost controls and sluggish iphone sales. Shares in the world s largest maker of phones and memory chips rose after it reported operating income of 8.1 trillion won ($6.9 billion) in the latest quarter, exceeding the 7.38 trillion-won average of analysts estimates compiled by Bloomberg and 6.9 trillion won a year earlier..-bloomberg LOLC Securities Limited,No.481,T.B.Jayah Mawatha, Colombo 1, Sri Lanka Page 4
Head Office Branches LOLC Securities Limited Kurunegala Branch Galle Branch Matara Branch No.481, No 6, 1st Floor, No 18, 1 st floor, T.B.Jayah Mawatha Union Assurance Building, Sri Dewamitta Mawatha, E.H. Cooray Towers, Colombo 1, Sri Lanka Rajapilla Mawatha Galle, Sri Lanka No 24, Tel: +94 11 5 889 889 Kurunegala, Sri Lanka Tel : +94 91 72852 Anagarika Dharmapala Mw. Fax: +94 11 2 662 883 Tel: +94 377 21221 Matara, Sri Lanka Fax: +94 372 225511 Tel: +94 414 93679 Contact Us Sriyan Gurusinghe CEO/Managing Director 11 5889888/ 77 7891871 sriyang@lolcsecurities.com Manjula Kumarasinghe COO - Sales & Marketing 11 588988 / 77 787431 manjulak@lolcsecurities.com Sales Head Office Maniesh Rodrigo Assistant General Manager- Sales 11 588985/ 77 789664 manieshr@lolcsecurities.com Samadhi Jayasinghe Imesh Fernando Naleen Sadeesh Manager Institutional Sales Assistant Manager Sales 11 588986 / 77 3954993 11 5889814 / 77 3954992 11 5889839/ 77 238329 samadhij@lolcsecurities.com imeshf@lolcsecurities.com naleensa@lolcsecurities.com Damith Chaminda 11 5889819/ 77 3367313 damithc@lolcsecurities.com Dushan Rajaguru 11 5889834/ 77 99511 dushanr@lolcsecurities.com Dinuka Niwantha 11 5889838 / 77 7769461 dinukan@lolcsecurities.com Niraj Jayamanne 11 5889813 / 77 5965645 nirajj@lolcsecurities.com Asendra Wijesiri 11 5889833 / 77 341627 asendraw@lolcsecurities.com Rehan Ariyaratne Business Dev. Associate 11 5889842 / 76 5446255 rehana@lolcsecurities.com Kurunegala Branch Rohana Chandrasiri Assistant General Manager 37 721221 / 77 36231 Anurudda Rajakaruna 37 721221 / 77 349464 Bandula Senarathne 37 721221 / 76 8743157 Nuwan Fernando 37 721221 / 77 8365921 rohanac@lolcsecurities.com anuruddhar@lolcsecurities.com bandulase@lolcsecurities.com nuwanfe@lolcsecurities.com Galle Branch Bimal Malinda Branch Head 91 72852 / 77 349243 Thilina Sameera 91 72852 / 77 8894968 Ushan De Silva 91 72852 / 77 1927998 bimalm@lolcsecurities.com thilinawa@lolcsecurities.com ushand@lolcsecurities.com Matara Branch Lalinda Liyanapathirana Ahamed Aadil Malitha Jayawardena 41 493679 / 77 3692257 41 493679 / 77 7538986 41 493679 / 76 6843569 lalindal@lolcsecurities.com aadila@lolcsecurities.com malithj@lolcsecurities.com RESEARCH Shehan Bartholomeuz Head of Research 11 5889835 / 77 7699148 Gayan Rajakaruna Senior Research Analyst 11 5889837 / 77 44697 Hiruni Perera Associate Research Analyst 11 588989 / 77 485784 shehanb@lolcsecurities.com gayanraj@lolcsecurities.com hirunipe@lolcsecurities.com General Disclaimer: LOLC Securities Limited is a company incorporated in Sri Lanka and licensed by the Securities and Exchange Commission of Sri Lanka to operate as a stockbroker/stock dealer in Sri Lanka. LOLC Securities Limited is a trading member of Colombo Stock Exchange. This research is based on information from sources that LOLC Securities Limited believes to be reliable. Whilst reasonable care has been taken to ensure accuracy of the information presented in the research, LOLC Securities Limited does not give a guarantee on the accuracy of the information presented in the paper nor will take the responsibility on investment decisions taken based on the information provided by the research and hence LOLC Securities Limited nor its employees accepts any liability whatsoever for any loss arising from investments decisions taken using the information provided in this paper. The reader also should note this paper does not give recommendations to any particular category of investors and investor should consult investment advisors for further clarifications regarding risks involved in investing in equity market. Investing in securities has inherent risks with no guaranteed return and price may be subjected to significant volatilities. No part of this report should be considered as a solicitation to buy or sell any security or product or to engage in or refrain from engaging in any transaction. LOLC Securities Limited or its employees may or may not hold positions in the securities discussed in the research and the information provided in the research should not be construed as a buy or sell instruction for any securities mentioned in the research, Unless otherwise specifically mentioned. This research is intended for general use for clients of LOLC Securities Limited and must not be copied in whole or in part or distributed to any third party for commercial use without permission from LOLC Securities Limited. If the reader is not the intended recipient please inform LOLC Securities Limited immediately by return email to research@lolcsecurities.com. LOLC Securities Limited s other staff including sales people, traders and other professionals may provide oral or written market commentaries or trading strategies to our clients which reflect opinions which are contrary to the opinions expressed in this research which may be influenced by different circumstances. OLC SEC Research Reports are also available at Bloomberg LOLC <GO> Page 5